TRADE INSTRUCTIONS

Date: February 22, 2018
Name: Signet Jewelers
Symbol: SIG (NYSE)
Type: Close
Limit: Sell at market             

TRADE RATIONALE

Under normal circumstances, I’d be tempted to extend the holding period for SIG by another month to capture its fourth-quarter and year-end results (due to be released on March 14). We have gone full circle in this position after building up a nice gain prior to the recent market correction.

But these aren’t normal circumstances, and despite today’s upturn after yesterday’s late selloff I’m still not convinced that we won’t see further selling in credit-dependent businesses in the weeks ahead. Higher interest rates mean higher borrowing costs and most of Signet’s purchases are made on credit so I am not going to extend this position.